Retail, especially it's local expression, has been one of the last to get relief from COVID shutdowns. Almost every town and city now has boarded up or vacant retail. We know from news and our own conversations that many of those stores aren't coming back. While big box stores have continued in-person and added lots of delivery and pick-up options, the smaller stores that give personality and social context to our communities have been shuttered.
I don't want to be Storeless.
Shopping is not just a "procurement method for securing commodities," it is a social act. The environments created by local stores, restaurants and entertainment facilities are a big part of what shapes the community experience. Ever seen a real estate ad that includes "close to shopping" as an amenity? It's part of what makes communities work, and for many people something they really enjoy.
Putnam wrote Bowling Alone in 2000, and someone will now have to write "Shopping Alone" to describe the change in social connections that are now occurring.
What does storeless really mean?
While it doesn't mean the disappearance of all stores, but the shift to online and home delivery does mean fewer local options, and fewer social connections as a result. It has direct local economic and tax base implications - sales tax pays for city streets, police and other essentials. It also means social connections that are real and tangible are becoming even more scarce and valuable. While this was a trend already developing, the pandemic accelerated it's progress by as much as a decade.
A personal conclusion: If you care about your community, then you'll want to be like the 49+% of people who have shopped locally on purpose in the last year.
Just in case you're skeptical about the depth of this change, consider these stats from a recent IAB report:
- The direct to customer brand economy grew five times faster than before pandemic.
- Most categories of consumer goods and services are now “majority digital,” with more consumers shopping by e-commerce than shopping solely at brick-and-mortar stores.
- McKinsey research reports that almost every consumer category will have 15-45% growth in online shopping as a permanent change.
- E-commerce is now about 25% of all retail commerce in U.S. That is more than 7x what it was in the mid '90's.
The impact of a storeless economy reaches beyond retail
The trend is obvious and disturbing, and it impacts far more than just retail.
The storeless economy is based on a big idea: as a buyer, I can access, research and purchase anything that I want online. I don't need a physical location (i.e. salesperson, showroom, vendor meeting, visit) to find what I need and make a decision. Here's the ripple effect in the mind of the buyer: if online access is good for toilet paper and groceries, why can't it be good for - everything?
How the Storeless Trend Impacts B2B
We live in a consumer ecology in which buyer's are affected by all the influences in their lives. What they experience as consumers changes what they expect as a business buyer. If they have a seamless media experience and buy a new couch online while they are watching streaming tv, they expect the B2B research and purchase to be just as seamless. B2B buyers are doing the same things to purchase as any consumer (and now they both shop from home). That means they want to discover, research, compare, verify and purchase using their mouse rather than in a meeting. It is the endless digital shelf applied to everything, including B2B.
How the Storeless Trend Impacts the Care Sector
If you are in home care, funeral care, or health related care, your customers are shifting just like those in retail. The storeless shift changes the way that your customers look for, evaluate and purchase your services. The myth that seniors no longer shop online was busted last spring when they doubled the national annual online grocery shopping stats in just a single month.
The huge risk for quality providers of home care, funeral care and health care is that the company with the best online process can easily edge out the more experience or higher quality provider.
Here are the top ways things have changed in the care sector:
- Since it's not just seniors making a care purchase decision, but also their network of family and friends, supporting the online approach that they use to look for and compare the options is critical. That requires more than just selecting an ad network, but a strategic approach to marketing.
- Delivery of services has changed too, with a great deal of care now being delivered over video. Whether you can deliver all of your services that way is not the point - being able to connect with people in the ways that they now expect can determine whether they will select you in the first place. For some industries like home care, offering even one digital or remote service will make you stand out.
- The entire care sector has to become more digital to create a seamless experience both pre and post purchase.
Why every brand needs to adapt to the storeless economy
Has there ever been a storeless economy in history? From earliest days, someone in every community has gathered and resold goods. Those locations (think trading post to the general store) became the hub for community social gatherings and connections. This is just one part of the massive customer reset that is now occurring, and brands that understand the magnitude of the shift and adapt have the opportunity for significant growth. Brands that ignore these shifts and simply hope that their best customers will come back stand to lose just as big.
How to Adapt:
- Without a doubt, the purchase process for both consumer and business buying starts and often finishes online. An almost completely online buying process is the new reality. Many businesses have resisted the idea that their buyers would be going online first. That is no longer a reasonable position to hold. Put simply, that means you have to create the online experience that will win customers. A brochure website, or one that only allows for a phone call response, isn't going to meet the challenge. Learn about how winning companies are creating this experience.
- Direct to brand is the new reality. Every winning brand is bypassing the "store" or other intermediary to gather direct buyer or consumer information and market directly. That means careful connections to your suppliers who may be marketing directly, and it means that winning brands of all sizes are going to get very good at collecting customer data and delivering their brand story directly to their customers. Here's the other big impact of direct to brand - very large brands are delivering super effective marketing directly to your customers. If your marketing looks amateurish or out of date by comparison to the big brands, then you are opening the door for the competition to take your market position by simply having better marketing.
- Brands are teaming up to maximize the sale. This is occurring in cross promotions, or offers that follow the sale. This strategy extends reach by multiplying the customers that can be served in a single transaction, and the total network of potential qualified customers grows. For example, if you sell pet grooming, the people who sell pet food could be a very good partner.
- Regaining and increasing loyalty to your brand, means that you need to include a social element - but that is not satisfied by having a social media account. Since we know that people have lost many of their opportunities to connect socially, the more your brand becomes a tribe, the stronger you will connect with people and create loyalty.
